Comptroller Thomas DiNapoli: Wall Street Is Doing Kinda/Sorta Better Than You


Whether you’re a part of the 47 Percent, the 99 Percent, the 1 Percent or some other slogan-driven demographic, this news should not surprise you: Wall Street is making a ton of money. Actually, it had its 5th best start of all time, doubling its profits from last year. In 2012 alone, the securities industry has a projected net profit of about $15 billion by the end of this year and it’s already made $10.5 billion or so; in 2011, this number was around $7 billion or so, partly due to the economic turbulence in continental Europe.

These were the statistics State Comptroller Thomas DiNapoli shared with the world yesterday in a statement that left the rest of us non-securities-industry folk the usual high and dry. However, these profits are a rough decline from what we saw immediately after the financial meltdown of 2008 (Remember the whole ‘golden parachutes’ phenomenon of 2009? Yeah, Wall Street was pushing a profit of about $60 billion then. Bailouts can really come in the clutch.)
But, now that the billions, if not trillions, in bailout money has more or less evaporated into thin air somewhere in Downtown Manhattan, Wall Street is on its own again. And this sharp jump in profits in less than 365 days proves the point that, with or without the help of the taxpayer, the security industry can still make a nice buck on its own.
Although this might come off as offensive to those seriously begrudged by the banks, one must keep in mind that the securities industry and their employees’ bonuses, which have seen a 13.9 percent in the past year, are main stimulants of New York City’s income tax base. After all those billions fly around the financial world, a solid portion of the revenue is eventually redistributed to the rest of Gotham in some form or another. In other words, a strong, healthy Wall Street benefits those beyond just Downtown.
What’s fascinating, though, is the contrast between the high profits and the small workforce that is creating all of this wealth. As of this past August, the $10.5 billion in Wall Street profits was created by about 168,700 people, according to Mr. DiNapoli. And just to get a picture of what we’re looking at here, the overall employment number has dropped by 4,800 jobs since May. So, in the end, profits are up but profiteers are down.
This sharp decline in the Wall Street job market is a result of several factors – the passing of the Dodd-Frank Act, which imposed half-ass regulations on the devices that blew our economy to shit, the uncertainty of this election, global markets and an overall sluggish recovery to name a few. But, who knows, the 7.8 percent unemployment rate that came out the other day might be a tip of the hat to this so-called recovery both Main Street and Wall Street are eagerly waiting for.
What we’re left with after this analytical shit storm all culminates in one figure from last year that localizes the whole ’90 percent of our wealth is owned by 1 percent of the nation’ idea we’ve heard a thousand times over.
In 2011, that $7 billion in Wall Street profit made up nearly a quarter of the entire private sector wages made in New York City last year. Juxtapose that startling stat with this: the securities industry fills about 5.3 percent of the entire private sector jobs in our town. With all those numbers floating around in your head, mull the conclusion over: 5.3 percent of the private sector workforce creates about a quarter of the total wealth in New York City, governmental jobs aside.
Memo to self: There’s still time to get a MBA.